LISBON (Reuters) - Portugal's prime minister and the leader of the main opposition party on Thursday agreed on additional austerity measures to cut the 2010 budget deficit by around 2 billion euros (1.7 billion pounds), half of that coming from tax hikes, a source close to the negotiations said.
New measures, expected to be approved at a cabinet meeting on Thursday after talks between Prime Minister Jose Socrates and PSD party leader Pedro Passos Coelho, would hike the maximum value-added tax rate to 21 percent from 20 percent and impose an additional tax on large companies' and banks' profits.
Income taxes would also have a yet unspecified increase, the source said. The other half of the additional consolidation effort would come from spending cuts.
The government said at the weekend it would cut the budget deficit to around 7 percent of gross domestic product this year compared to 8.3 percent as outlined in Portugal's Brussels-approved medium-term budget consolidation strategy.
(Reporting by Sergio Goncalves, writing Andrei Khalip)
